SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SIMON PROPERTY GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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Simon Property Group, Inc.
115 West Washington Street
Indianapolis, Indiana 46204
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To The Stockholders of Simon Property Group, Inc.:
Please take notice that the 1999 Annual Meeting of Stockholders of Simon
Property Group, Inc. will be held at The Indianapolis Hyatt Regency, One South
Capitol Avenue, Indianapolis, Indiana, on Wednesday, May 12, 1999 at 11:00
a.m., Indianapolis time, to consider the following proposals:
(1) to elect a total of thirteen (13) directors (seven (7) to be elected by
the holders of all classes of voting securities, four (4) to be elected
by the holders of Class B Common Stock and two (2) to be elected by the
holders of Class C Common Stock) each to serve until the next annual
meeting of stockholders;
(2) to ratify the appointment of Arthur Andersen LLP as independent
accountants for 1999; and
(3) to transact such other business as may come before the meeting.
Only stockholders of record at the close of business on March 17, 1999 will
be entitled to vote at the meeting or any adjournment or postponement thereof.
We cordially invite you to attend the meeting, but regardless of whether
you plan to be present, please promptly date, mark, sign and mail the enclosed
Proxy in the envelope provided, which requires no additional postage if mailed
in the United States. Any stockholder who executes and delivers a Proxy may
revoke the authority granted thereunder at any time prior to its use by giving
written notice of such revocation to the undersigned at 115 West Washington
Street, Indianapolis, Indiana 46204, by executing and delivering a Proxy
bearing a later date or by attending and voting at the meeting. Your vote is
important, regardless of the number of shares you own.
The Annual Report for the year ended December 31, 1998 is also enclosed.
By Order of the Board of Directors
of Simon Property Group, Inc.
/s/ James M. Barkley, Secretary
Dated: April 2, 1999
SPG Realty Consultants, Inc.
115 West Washington Street
Indianapolis, Indiana 46204
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To The Holders of Beneficial Interests in Shares of Stock of SPG Realty
Consultants, Inc.:
Please take notice that the 1999 Annual Meeting of Stockholders of SPG
Realty Consultants, Inc. will be held at The Indianapolis Hyatt Regency, One
South Capitol Avenue, Indianapolis, Indiana, on Wednesday, May 12, 1999 at
11:00 a.m., Indianapolis time, to consider the following proposals:
(1) to elect thirteen (13) directors, each to serve until the next annual
meeting of stockholders;
(2) to ratify the appointment of Arthur Andersen LLP as independent
accountants for 1999; and
(3) to transact such other business as may come before the meeting.
Only holders of beneficial interest of record at the close of business on
March 17, 1999 will be entitled to vote at the meeting or any adjournment or
postponement thereof.
We cordially invite you to attend the meeting, but regardless of whether
you plan to be present, please promptly date, mark, sign and mail the enclosed
Proxy in the envelope provided, which requires no additional postage if mailed
in the United States. Any holder who executes and delivers a Proxy may revoke
the authority granted thereunder at any time prior to its use by giving
written notice of such revocation to the undersigned at 115 West Washington
Street, Indianapolis, Indiana 46204, by executing and delivering a Proxy
bearing a later date or by attending and voting at the meeting. Your vote is
important, regardless of the number of shares you own.
The Annual Report for the year ended December 31, 1998 is also enclosed.
By Order of the Board of Directors
of SPG Realty Consultants, Inc.
/s/ James M. Barkley, Secretary
Dated: April 2, 1999
Simon Property Group, Inc.
SPG Realty Consultants, Inc.
115 West Washington Street
Indianapolis, Indiana 46204
JOINT PROXY STATEMENT
FOR ANNUAL MEETINGS OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1999
GENERAL
This Joint Proxy Statement is being furnished to stockholders of Simon
Property Group, Inc., a Delaware corporation ("SPG"), and the holders of
beneficial interests of the outstanding stock of SPG Realty Consultants, Inc.,
a Delaware corporation ("SRC" and together with SPG, the "Companies"), in
connection with the solicitation of proxies by SPG's Board of Directors (the
"SPG Board of Directors") and SRC's Board of Directors (the "SRC Board of
Directors" and together with the SPG Board of Directors, the "Boards of
Directors") for use at SPG's 1999 Annual Meeting of Stockholders and at any
and all adjournments or postponements thereof (the "SPG Meeting") and SRC's
1999 Annual Meeting of Stockholders and at any and all adjournments or
postponements thereof (the "SRC Meeting" and together with the SPG Meeting,
the "Meetings"), respectively, to be held on May 12, 1999, at the time and
place and for the purposes specified in the accompanying Notices.
The Companies are the successors to Simon DeBartolo Group, Inc. ("SDG"),
Corporate Property Investors, Inc. ("CPI") and Corporate Realty Consultants,
Inc. ("CRC") which combined their operations pursuant to transactions that
became effective as of the close of business on September 24, 1998 (the "CPI
Merger").
Each share of SPG's Common Stock, par value $.0001 per share ("SPG
Common"); Class B Common Stock, par value $.0001 per share ("SPG Class B
Common"); Class C Common Stock, par value $.0001 per share ("SPG Class C
Common"); and Series A Convertible Preferred Stock, par value $.0001 per share
("SPG Series A Preferred" and together with the SPG Common, SPG Class B Common
and SPG Class C Common, the "SPG Voting Stock") is paired with a beneficial
interest in shares of Common Stock, par value $.0001 per share, of SRC ("SRC
Shares") in units consisting of one share of SPG Voting Stock and a beneficial
interest in one-one hundredth ( 1/100th) of an SRC Share (a "Paired Share").
The SRC Shares are held by trusts (the "Trusts") for the benefit of the
holders of SPG Voting Stock. Beneficial interests in the SRC Shares are not
transferable separately but only by and as part of a transfer of shares of SPG
Voting Stock.
This Joint Proxy Statement and the related form of proxy are first being
mailed on or about April 2, 1999.
The Boards of Directors have fixed the close of business on March 17, 1999,
as the record date for the Meetings.
Voting Securities
SPG. On the record date, there were outstanding 169,278,425 shares of SPG
Common, 3,200,000 shares of SPG Class B Common, 4,000 shares of SPG Class C
Common and 59,249 shares of SPG Series A Preferred. As to matters subject to
the approval of holders of voting stock, holders of SPG Series A Preferred are
entitled to a number of votes equal to the number of shares of SPG Common into
which their shares would be convertible, or 2,251,187. As a result, an
aggregate of 174,733,612 shares are entitled to vote (the "Voting Shares") at
the SPG Meeting. The presence at the SPG Meeting in person or by proxy of a
majority of all the votes entitled to be cast at the SPG Meeting or 87,366,807
Voting Shares will constitute a quorum for the transaction of business.
All of the SPG Class B Common is owned by Melvin Simon, Herbert Simon and
David Simon, all of whom are executive officers of the Companies, as voting
trustees. All of the SPG Class C Common is owned by The
Edward J. DeBartolo Corporation ("EJDC"). The SPG Board of Directors is not
soliciting Proxies in respect of the SPG Class B Common or the SPG Class C
Common, although such shares are expected to be represented at the SPG
Meeting.
Holders of the SPG Class B Common have informed SPG that they intend to
cause all such shares to be voted in favor of the seven nominees for
Independent Director and the four nominees for Class B Director named below.
Holders of the SPG Class C Common have informed SPG that they intend to cause
all such shares to be voted in favor of the seven nominees for Independent
Director and the two nominees for Class C Director.
SRC. On the record date, there were outstanding 1,747,336.12 SRC Shares
which are held by the Trusts for the benefit of SPG's stockholders and are
entitled to vote at the SRC Meeting. The presence at the SRC Meeting in person
or by proxy of a majority of all of the votes entitled to be cast at the SRC
Meeting or beneficial interests in 873,668.07 SRC Shares will constitute a
quorum for the transaction of business.
As to the election of the SRC Board of Directors, the trustees of the
Trusts are obligated to vote the SRC Shares held by them in accordance with
the instructions received by them from SPG so that each director of SRC is
also a director of SPG. As to all other matters, the trustees will vote in
accordance with the vote of the holders of beneficial interests in SRC Shares.
Required Vote
Except for shares of Series A Preferred, which are entitled to vote on an
as-converted basis as described above, all shares entitled to vote at the
Meetings are entitled to one vote per share. A plurality of the votes is
required to elect directors. On all other proposals, the proposal will be
approved if the number of votes cast in favor exceed the number of votes
against. Abstentions and broker non-votes will be treated as shares not voted
and will have no effect on such voting.
Proxies
Valid Proxies will be voted at the Meetings as specified thereon. Any
person giving a Proxy may revoke it by written notice to the Companies at any
time prior to its exercise or by executing and delivering a Proxy bearing a
later date. Attendance at the Meetings by a stockholder will not constitute a
revocation of a Proxy unless such stockholder affirmatively indicates at the
Meetings that such stockholder intends to vote in person.
Unless contrary instructions are indicated on the Proxy, all shares
represented by valid Proxies received pursuant to this solicitation (and not
revoked before they are voted) will be voted FOR the election of the nominees
named in the Proxy and FOR the appointment of Arthur Andersen LLP as the
Companies' independent accountants for the year ending December 31, 1999.
Other Business
The Companies know of no business other than that set forth above to be
transacted at the Meetings, but if other matters requiring a vote do arise, it
is the intention of the persons named in the Proxy to vote in accordance with
their judgment on such matters.
COSTS OF PROXY SOLICITATION
The cost of preparing, assembling, and mailing the proxy material will be
borne by the Companies. It is expected that solicitation will be made
primarily by mail, but employees of the Companies or other representatives of
the Companies may also solicit Proxies without additional compensation. The
Companies will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which shares are beneficially
owned by others, to send the proxy material to, and to obtain Proxies from,
such
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beneficial owners and will reimburse such holders for their reasonable
expenses in doing so. In addition, the Companies have retained Beacon Hill
Partners, Inc., a proxy solicitation firm, to assist in the solicitation of
Proxies. Such firm will be paid a fee of $5,000 for its services. The
telephone number of Beacon Hill Partners, Inc. is (212) 843-8500.
INCORPORATION BY REFERENCE
To the extent this Proxy Statement has been or will be specifically
incorporated by reference into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, the sections of
this Proxy Statement entitled "Report of Compensation Committee on Executive
Compensation" and "Performance Graph" shall not be deemed to be so
incorporated unless specifically otherwise provided in any such filing.
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Paired Shares and units of limited partnership interest ("Units")
which are exchangeable for Paired Shares as of March 17, 1999 by (1) each
director and nominee for director, (2) the executive officers named in the
Summary Compensation Table and (3) the directors and executive officers of the
Companies, as a group. Unless otherwise indicated in the footnotes, Paired
Shares or Units are owned directly, and the indicated person has sole voting
and investment power.
Number of Percent of Number Percent
Paired Shares Paired Shares of Units of Units
Beneficially Beneficially Beneficially Beneficially
Name of Beneficial Owner Owned (1)(2)(3) Owned (4) Owned Owned(5)
- ------------------------ --------------- ------------- ------------ ------------
Robert E. Angelica...... 0 -- 0 --
Birch Bayh.............. 17,000 * 0 --
Hans C. Mautner......... 608,930 * 0 --
G. William Miller....... 10,440 * 0 --
Fredrick W. Petri....... 14,520 * 0 --
David Simon............. 2,259,394(6) 1.3% 1,991,064 *
Herbert Simon........... 5,641,112(7) 3.1% 5,571,961 2.4%
Melvin Simon............ 7,206,899(7) 4.0% 7,149,489 3.1%
J. Albert Smith, Jr..... 15,000 * 0 --
Richard S. Sokolov...... 304,976 * 60,835 *
Pieter S. van den Berg.. 0 -- 0 --
Philip J. Ward.......... 6,802 * 0 --
M. Denise DeBartolo
York................... 1,319,006(8) * 1,290,439 *
William J. Garvey....... 122,050 * 21,200 *
James A. Napoli......... 90,480 * 0 --
All directors and
executive officers as a
group(9) (22 persons).. 62,402,384 26.8% 56,960,552 24.6%
- --------
*Less than one percent
(1) Includes the following Paired Shares that may be purchased pursuant to
stock options that are exercisable within 60 days: David Simon--200,000;
Hans C. Mautner--250,956; Birch Bayh--17,000; G. William Miller--6,360;
Fredrick W. Petri--6,360; J. Albert Smith, Jr.--14,000; Philip J. Ward--
6,360; William J. Garvey--55,000; James A. Napoli--50,000; and all
directors and executive officers as a group--903,536. Pursuant to an
agreement with Telephone Real Estate Equity Trust ("TREET"), Robert E.
Angelica has assigned the economic benefit of his stock options to TREET.
Pieter S. van den Berg has assigned the economic benefit of his stock
options to PGGM, a Dutch pension fund. Includes 68,354 Paired Shares
issuable upon conversion of SPG Series B Convertible Preferred Stock, par
value $.0001 per share ("SPG Series B Preferred") which are owned by Hans
C. Mautner.
(2) Includes the following Paired Shares that may be received upon exchange of
Units held by the following persons on March 17, 1999: David Simon--
1,991,064; Herbert Simon--5,571,961; Melvin Simon--7,149,489; Richard S.
Sokolov--60,835; M. Denise DeBartolo York--1,290,439; William J. Garvey--
21,200; and all directors and executive officers as a group--56,960,552.
Units held by limited partners are exchangeable either for Paired Shares
(on a one-to-one basis) or for cash as selected by the Independent
Directors.
(3) Includes the following restricted shares which are subject to vesting
requirements: David Simon--17,744; Richard S. Sokolov--75,508; William J.
Garvey--17,744; James A. Napoli--17,744; and all directors and executive
officers as a group--252,573.
(4) At March 17, 1999, there were 169,278,425 shares of SPG Common, 3,200,000
shares of SPG Class B Common, 4,000 shares of SPG Class C Common and
59,249 shares of SPG Series A Preferred outstanding. Upon the occurrence
of certain events, shares of SPG Class B Common Stock and SPG Class C
Common convert automatically into SPG Common (on a share-for-share basis).
No officer or director beneficially
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owns shares of SPG Series A Preferred. The percentages in this column assume
the exercise of stock options, exchange of Units for Paired Shares and
conversion of SPG Series B Preferred only by the applicable beneficial
owner.
(5) At March 17, 1999, there were 231,376,568 outstanding Units of which the
Company owned, directly or indirectly, 167,194,411 or 72.3%. The
percentages in this column assume that no Units are exchanged for Paired
Shares.
(6) Includes Units owned by trusts of which David Simon is a beneficiary.
(7) Does not include 14,665,824 Paired Shares and Units held by Melvin Simon &
Associates, Inc. and certain related persons and entities. See "PRINCIPAL
SHAREHOLDERS."
(8) Does not include Paired Shares and Units held by EJDC and certain related
persons and entities. See "PRINCIPAL SHAREHOLDERS."
(9) Includes Paired Shares and Units held by EJDC, Melvin Simon & Associates,
Inc. and certain related persons and entities. See "PRINCIPAL
SHAREHOLDERS."
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information concerning each person
(including any group) known to the Companies to beneficially own more than five
percent (5%) of any class of voting securities of the Companies as of March 17,
1999. Unless otherwise indicated in the footnotes, shares are owned directly,
and the indicated person has sole voting and investment power.
SPG Common Stock (1) SPG Series A Preferred
-------------------------------------------------
Name and Address of Number of Number of
Beneficial Owner Shares % (2) Shares %
- ------------------- ------------- ---------------------------------
Alaska Permanent Fund
Corporation................. 2,243,189(3) 1.28% 49,821 84.09%
801 West 10th Street
Suite 302
Juneau, AK 99801-4100
The Edward J. DeBartolo
Corporation, et al.(4)...... 22,255,166(5) 11.30% -- --
7620 Market Street
Youngstown, OH 44513
Kuwait Investment Authority.. 11,352,649(6) 6.42% -- --
as agent for the Government
of Kuwait
P.O. Box 64
Safat, Kuwait, Attn.: Dr.
Adnan Al-Sultan
Melvin Simon & Associates,
Inc., et al.(7)............. 27,513,835(8) 13.83% -- --
115 W. Washington Street
Indianapolis, IN 46204
Telephone Real Estate Equity
Trust....................... 22,297,708(9) 12.46% 3,450 5.82%
State Street Bank & Trust
Company, as Trustee of the
Telephone Real Estate Equity
Trust
Master Trust Division W6C
One Enterprise Drive, North
Quincy, MA 02171
United States Steel &
Carnegie Pension Fund,
as Trustee of the U.S. Steel
Group Trust................. 828,533(10) * 2,989 5.04%
767 Fifth Avenue
New York, NY 10153
United States Steel &
Carnegie Pension Fund,
as Trustee of the Marathon
Oil Group Trust............. 113,568(11) * 2,989 5.04%
767 Fifth Avenue
New York, NY 10153
5
- --------
*Less than 1%.
(1) SPG Common Stock includes shares of SPG Common, SPG Class B Common and
SPG Class C Common, including their respective paired proportionate
beneficial ownership interests in SRC Common. Upon the occurrence of
certain events, shares of SPG Class B Common and SPG Class C Common
convert automatically into SPG Common (on a share-for-share basis). At
the option of the holders of the SPG Series A Preferred, such shares
convert into shares of SPG Common (at the rate of approximately 37.995
shares of SPG Common for each share of SPG Series A Preferred). Also
assumes conversion of SPG Series B Preferred, which is convertible into
SPG Common (at the rate of approximately 2.586 shares of SPG Common for
each share of SPG Series B Preferred) at the option of the holders. The
amounts in the table also include Paired Shares that may be issued upon
the exchange of Units. Units held by limited partners are exchangeable
either for Paired Shares (on a one-to-one basis) or for cash as selected
by the Independent Directors.
(2) Assumes the exercise of stock options, exchange of Units for Paired
Shares and conversion of SPG Series B Preferred by the subject holder
only. Also assumes conversion of SPG Series A Preferred by all holders.
(3) Includes 1,892,967 shares of SPG Common issuable upon conversion of SPG
Series A Preferred, 66,875 shares issuable upon conversion of SPG Series
B Preferred and 283,347 outstanding shares of SPG Common.
(4) The beneficial owners of the securities are EJDC, directly or indirectly,
the estate of the late Edward J. DeBartolo, members of the DeBartolo
family, including Edward J. DeBartolo, Jr. and M. Denise DeBartolo York,
or trusts established for the benefit of members of the DeBartolo family
or partnerships in which the foregoing persons hold partnership
interests.
(5) Includes 22,222,599 shares of SPG Common issuable upon exchange of Units
and 4,000 outstanding shares of SPG Class C Common.
(6) Includes 9,184,832 shares of SPG Common currently outstanding and
2,167,817 shares of SPG Common issuable upon conversion of 838,273 shares
of SPG Series B Preferred.
(7) This group consists of Melvin Simon & Associates, Inc. ("MSA"), a wholly
owned subsidiary of MSA, Melvin Simon and Herbert Simon. MSA is owned 69%
by Melvin Simon and 31% by Herbert Simon.
(8) Includes 24,187,274 shares of SPG Common issuable upon exchange of Units
and 3,200,000 shares of SPG Class B Common currently held by MSA, Melvin
Simon and Herbert Simon. Does not include 10,665,511 shares of SPG Common
and Units held by David Simon and family trusts of the Simons over which
MSA, Melvin Simon and Herbert Simon do not have voting or dispositive
power.
(9) Includes 17,933,851 shares of SPG Common currently outstanding, 131,084
shares of SPG Common issuable upon conversion of 3,450 shares of SPG
Series A Preferred and 4,232,773 shares of SPG Common issuable upon
conversion of 1,636,771 shares of SPG Series B Preferred Stock.
(10) Includes 113,568 shares of SPG Common issuable upon conversion of SPG
Series A Preferred, 136,523 shares of SPG Common issuable upon conversion
of SPG Series B Preferred and 578,442 outstanding shares of SPG Common.
(11) Consists of 113,568 shares of SPG Common issuable upon conversion of SPG
Series A Preferred.
ELECTION OF DIRECTORS
SPG. Under the SPG Charter, seven directors are to be elected by the
holders of Voting Shares, four directors are to be elected by the holders of
SPG Class B Common and two directors are to be elected by the holders of SPG
Class C Common. Each director will serve until the 2000 annual meeting of
stockholders and until his or her successor has been elected.
By virtue of a voting trust agreement, the shares of SPG Class B Common are
held until December 20, 2003, by a voting trust and such trust is obligated to
elect Melvin Simon, Herbert Simon and David Simon as directors of SPG and SRC.
Mr. Richard S. Sokolov's employment agreement with SPG provides that SPG
shall use its best efforts to cause Mr. Sokolov to be elected to the SPG Board
of Directors at each annual meeting of shareholders at which directors of SPG
are to be elected.
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SRC. Under the SRC Charter, thirteen directors are to be elected by the
holders of SRC Shares. Each director will serve until the 2000 annual meeting
of stockholders and until his or her successor has been elected.
The trustees of the Trusts are obligated to vote the SRC Shares held by
them as instructed by SPG so that each member of the Board of Directors of SRC
is also a director of SPG.
Set forth below are the names of and certain other information regarding
the nominees for director. Information about each such person's ownership of
securities of the Companies appears elsewhere in this Proxy Statement.
The Boards of Directors unanimously recommend that stockholders vote FOR
the nominees named below.
Nominees to be Elected by Holders of Voting Shares
Robert E. Angelica, 52, has been a director of the Companies since 1998 and
prior to that was a director of CPI since 1997. He is President and Chief
Investment Officer of the AT&T Investment Management Corporation, a position
he has held since 1992. Mr. Angelica is also a director of The Emerging
Markets Growth Fund, Inc. and The India Magnum Fund, Ltd.
Birch Bayh, 71, has been a director of the Companies since 1998 and prior
to that was a director of SDG since 1993. He has been the senior partner in
the Washington, D.C. law firm of Oppenheimer, Wolff, Donnelly & Bayh LLP
(formerly Bayh, Connaughton, & Malone, P.C.) for more than five years. He
served as a United States Senator from Indiana from 1963 to 1981. Mr. Bayh
also serves as a director of ICN Pharmaceuticals, Inc.
Hans C. Mautner, 61, has been the Vice Chairman of the Boards of Directors
of the Companies since 1998 and prior to that was Chairman of the Board of
Directors and Chief Executive Officer of CPI and CRC from 1989 to 1998. He was
also a director of CPI from 1973 to 1998 and of CRC from 1975 to 1998. He
served as Vice President of CPI from 1972 to 1973, when he was appointed
Executive Vice President. Mr. Mautner was elected President of CPI and CRC in
1976, was elected Chairman and President in 1988, and was elected Chairman,
President and Chief Executive Officer of CPI and CRC in 1989. Prior to joining
CPI, he was a General Partner of Lazard Freres. Mr. Mautner is currently a
director of Cornerstone Properties Inc. and a board member for seven funds in
The Dreyfus Family of Funds.
G. William Miller, 74, has been a director of the Companies since 1998 and
prior to that was a director of SDG since 1996. He has been Chairman of the
Board and Chief Executive Officer of G. William Miller & Co. Inc., a merchant
banking firm, since 1983. He is a former Secretary of the U.S. Treasury and a
former Chairman of the Federal Reserve Board. From January 1990 until February
1992, he was Chairman and Chief Executive Officer of Federated Stores, Inc.,
the parent company of predecessors to Federated Department Stores, Inc. Mr.
Miller is Chairman of the Board and a director of Waccamaw Corporation. He is
also a director of GS Industries, Inc., Kleinwort Benson Australian Income
Fund, Inc. and Repligen Corporation.
J. Albert Smith, Jr., 58, has been a director of the Companies since 1998
and prior to that was a director of SDG since 1993. He is a Managing Director
of Bank One Corporation, a position he has held since October, 1998. Prior to
his current position, he was the President of Bank One, Indiana, NA, a
commercial bank, a position he held since September, 1994. From 1974 until
September, 1994, he was the President of Banc One Mortgage Corporation, a
mortgage banking firm.
Pieter S. van den Berg, 53, has been a director of the Companies since
1998. He has been Director Controller of PGGM, a Dutch pension fund, since
1991.
Philip J. Ward, 50, has been a director of the Companies since 1998 and
prior to that was a director of SDG since 1996. He is Senior Managing
Director, Head of Real Estate Investments, for CIGNA Investments,
7
Inc., a wholly-owned subsidiary of CIGNA Corporation. He is a member of the
International Council of Shopping Centers, the Urban Land Institute, the
National Association of Industrial and Office Parks and the Society of
Industrial and Office Realtors. He is a director of Patriot American
Hospitality Inc.
Nominees to be Elected by Holders of SPG Class B Common
Melvin Simon, 72, has been a Co-Chairman of the Board of the Companies
since 1998 and prior to that was Co-Chairman of the Board and a director of
SDG since its incorporation. In addition, he is a Co-Chairman of the Board of
Melvin Simon & Associates, Inc. ("MSA"), a company he founded in 1960 with his
brother, Herbert Simon. He is also an officer of the indirect general partner
of SZS 33 Associates, L.P., a Delaware limited partnership ("SZS"), that filed
a bankruptcy petition in the United States Bankruptcy Court for the Southern
District of New York on October 12, 1998 as part of a prepackaged Chapter 11
plan (the "Plan"). The Plan was confirmed on January 13, 1999, and the assets
of SZS were transferred to a creditor on February 24, 1999.
Herbert Simon, 64, has been a Co-Chairman of the Board of the Companies
since 1998 and prior to that was a director of SDG since its incorporation. He
served as Chief Executive Officer of SDG from its incorporation to 1995, when
he was appointed Co-Chairman of the Board. In addition, he is a Co-Chairman of
the Board of MSA. He is also a director of Kohl's Corporation, a specialty
retailer and he is an officer of the indirect general partner of SZS.
David Simon, 37, has been the Chief Executive Officer and a director of the
Companies since 1998. Prior to that he was the Chief Executive Officer of SDG
since 1995 and had been a director of SDG since its incorporation. He served
as President of SDG from its incorporation until 1995. In addition, he is
currently Executive Vice President of MSA and he has held other offices with
MSA since 1990. From 1988 to 1990, he was Vice President of Wasserstein
Perella & Company, a firm specializing in mergers and acquisitions. He is the
son of Melvin Simon, the nephew of Herbert Simon and a director of First
Health Corp. He is also an officer of the indirect general partner of SZS.
Richard S. Sokolov, 49, is the President and Chief Operating Officer of the
Companies and has been a director of the Companies since 1998 and prior to
that was a director of SDG since 1996. He served as the President and Chief
Executive Officer and a director of DeBartolo Realty Corporation ("DRC") from
its incorporation until it merged with SDG in 1996. Prior to that he had
served as Senior Vice President, Development of EJDC since 1986 and as Vice
President and General Counsel since 1982. In addition, Mr. Sokolov is
President, a trustee and a member of the Executive Committee of the
International Council of Shopping Centers.
Nominees to be Elected by Holders of SPG Class C Common
Fredrick W. Petri, 52, has been a director of the Companies since 1998 and
prior to that was a director of SDG since 1996. He is a partner of Petrone,
Petri & Company, a real estate investment firm he founded in 1993, and an
officer of Housing Capital Company since its formation in 1994. Prior thereto,
he was an Executive Vice President of Wells Fargo Bank, where for over 18
years he held various real estate positions. Mr. Petri is currently a trustee
of the Urban Land Institute and a director of Storage Trust Realty. He
previously was a member of the Board of Governors and a Vice President of the
National Association of Real Estate Investment Trusts and a director of the
National Association of Industrial and Office Park Development. He is a
director of the University of Wisconsin's Real Estate Center.
M. Denise DeBartolo York, 48, has been a director of the Companies since
1998 and prior to that was a director of SDG since 1996. She served as a
director of DRC from 1995 to 1996. She currently serves as Chairman of the
Board of EJDC. Ms. DeBartolo York previously served EJDC as Executive Vice
President of Personnel/Communications and has been associated with EJDC in an
executive capacity since 1975.
8
Attendance and Committees of the Boards of Directors
During 1998 and prior to the CPI Merger, the Board of Directors of SDG held
nine meetings, the Board of Directors of CPI held eight meetings, and the
Board of Directors of CRC held four meetings. Following the CPI Merger, the
Boards of Directors held one meeting during 1998. The Boards of Directors have
established four standing committees, the Compensation Committee, the Audit
Committee, the Executive Committee and the Nominating Committee. Other than
William T. Dillard, II, G. William Miller and Denise DeBartolo York, all
directors attended 75% or more of the meetings of the Boards and each
committee on which they served.
The Compensation Committee, which currently consists of Messrs. Herbert
Simon, Angelica, Bayh, Petri and Ward, sets remuneration levels for officers
of the Companies, reviews significant employee benefit programs and
establishes, as it deems appropriate, and administers executive compensation
programs, including bonus plans, stock option and other equity-based programs,
deferred compensation plans and any other cash or stock incentive programs.
The SDG Compensation Committee met one time during 1998.
The Audit Committee, which currently consists of Messrs. Smith, Miller and
Petri, makes recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the scope of the
audit engagement, reviews the independent public accountants' letter of
comments and management's responses thereto, approves professional services
provided by the independent public accountants, reviews the independence of
the independent public accountants, reviews any major accounting changes made
or contemplated, considers the range of audit and non-audit fees, and reviews
the adequacy of the Companies' internal accounting controls. During 1998, the
SDG Audit Committee met one time prior to the CPI Merger and the Companies'
Audit Committee met one time after the CPI Merger.
The Executive Committee, which currently consists of Messrs. Melvin Simon,
Herbert Simon, David Simon, Mautner and Sokolov, approves the acquisition and
disposition of real property, authorizes the execution of certain contracts
and agreements, including those related to the borrowing of money by the
Companies, and generally exercises all other powers of the Board of Directors
between meetings of the Board of Directors, except in cases where action of
the entire Board of Directors is required and except where action by
Independent Directors (as defined in the Companies' Charters) is required by
the Companies' conflict of interest policies. During 1998, the SDG Executive
Committee met two times prior to the CPI Merger and the Companies' Executive
Committee met one time after the CPI Merger.
The Nominating Committee, which currently consists of Messrs. Herbert
Simon, David Simon, Bayh and Miller and Ms. York, nominates persons to serve
as directors who are elected by the holders of Paired Shares. In considering
persons to nominate, the Nominating Committee will consider persons
recommended by stockholders. The SDG Nominating Committee met one time during
1998 prior to the CPI Merger.
The By-Laws of the Companies require that each committee except the
Executive Committee, the Audit Committee and the Nominating Committee must
have at least one member who was elected by the SPG Class B Common and at
least one member elected by the SPG Class C Common. The entire Audit Committee
and a majority of the Compensation Committee must be composed of Independent
Directors. Further, the Nominating Committee is required to have five members
with two members elected by the SPG Class B Common and one member elected by
the SPG Class C Common.
At the meetings of directors to be held following the Meetings, the Boards
will reappoint members of the Boards to the four standing committees.
Compensation of Directors
The Companies pay directors who are not employees of the Companies or their
affiliates annual compensation of $20,000 plus $1,000 for attendance (in
person or by telephone) at each meeting of the Boards of Directors or a
committee thereof. Joint meetings of the SPG Board of Directors and the SRC
Board of Directors are considered one meeting and joint meetings of the
respective standing committees of the SPG Board of Directors and the SRC Board
of Directors are considered one meeting of each such standing committee.
9
Directors who are employees of the Companies or their affiliates do not
receive any compensation for their services as directors. In addition, all
directors are reimbursed for their expenses incurred in attending directors'
meetings. Directors of SPG who are not employees of the Companies or their
affiliates are automatically granted each year options to purchase 3,000
shares of SPG Common multiplied by the number of calendar years that have
elapsed since such person's last election to the Board of Directors of SPG. In
addition, such directors are eligible to be granted discretionary awards under
and to participate in SPG's incentive stock option plan, as described below
under "Executive Compensation--Option Plans." On March 1, 1999, eligible
directors were awarded discretionary options under the plan to compensate them
either for initial election to the Board of Directors or for having served as
directors for more than one year without receiving automatic grants under the
previous option plan as follows: Mr. Angelica--3,000; Mr. Bayh--3,000; Mr.
Miller--6,000; Mr. Petri--6,000; Mr. Smith--6,000; Mr. van den Berg--5,000;
Mr. Ward--6,000; and Ms. DeBartolo York--3,000. Pursuant to an agreement with
TREET, Mr. Angelica will assign the economic benefit of his options to TREET.
Mr. van den Berg will assign the economic benefit of his options to PGGM, a
Dutch pension fund.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
SPG's directors, executive officers and beneficial owners of more than 10% of
the capital stock of SPG to file reports of ownership and changes of ownership
with the Securities and Exchange Commission and the New York Stock Exchange.
Based solely on its review of the copies of such forms received by it, and/or
written representations from certain reporting persons, the Companies believe
that, during the year ended December 31, 1998, their directors, executive
officers and beneficial owners of more than 10% of SPG's capital stock have
complied with all filing requirements applicable to them.
10
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
services in all capacities to the Companies for the year ended December 31,
1998, for the Chief Executive Officer and the four other most highly
compensated executive officers of the Companies for the year ended December
31, 1998 (the "Named Executives"). The amounts shown in the table reflect all
compensation paid to the Named Executives by the Companies and their
predecessors, SDG, CPI and CRC.
Summary Compensation Table
Annual Long-Term
Compensation Compensation
-------------------- ---------------------
Restricted Securities All Other
Name and Principal Stock Underlying Compensation
Position(1) Year Salary Bonus(2) Awards Options(3) (4)
- ------------------ ---- -------- -------- ---------- ---------- ------------
David Simon............. 1998 $800,000 $ 0 $ -- -- $ 9,394
Chief Executive Officer 1997 744,489(5) 450,000 -- -- 11,012
1996 610,389(5) 300,000 -- -- 11,056
Hans C. Mautner......... 1998 $626,676 $ 0 $ -- 237,500 $12,197,459(6)
Vice Chairman 1997 550,000 375,000 -- 60,000 119,585
Richard S. Sokolov...... 1998 $608,654 $ 0 $ -- -- $ 34,529
President and Chief 1997 522,264 250,000 -- -- 8,302
Operating Officer 1996 202,134 175,000 -- -- --
William J. Garvey....... 1998 $426,406 $100,000 $ -- -- $ 9,498
Executive Vice
President-- 1997 395,977 100,000 -- -- 15,563
Property Development 1996 375,000 100,000 -- -- 12,362
James A. Napoli......... 1998 $409,927 $250,000 $ -- -- $ 11,392
Executive Vice
President-- 1997 366,149 125,000 -- -- 15,563
Leasing 1996 316,154 110,000 -- -- 12,362
- --------
(1) Does not include three former officers of CPI who are no longer employed
by SPG and who would have placed in the four most highly compensated
executive officers based on one-time or severance payments made in
connection with the CPI Merger, including Mark S. Ticotin, a former
executive officer of CPI and SPG who received approximately $7,580,297
total compensation in 1998, a substantial portion of which was a one-time
payment made by CPI immediately prior to and in connection with the CPI
Merger. Mr. Ticotin's total compensation also includes forgiveness of a
$1,248,729 debt relating to shares of CPI stock purchased under the CPI
Employee Share Purchase Plan, which debt was forgiven pursuant to the
terms of and in connection with the CPI Merger. In addition, CPI paid
taxes in the amount of $3,211,900 on behalf of Mr. Ticotin immediately
prior to and in connection with the CPI Merger.
(2) Bonus awards are accrued in the year indicated and paid in the following
year.
(3) For 1998, represents number of shares of SPG Common, paired with a
beneficial interest in SRC Shares.
(4) Represents annualized amounts of (i) employer paid contributions to the
401(k) retirement plan and (ii) company paid employee and dependent life
insurance premiums. Employer contributions to the 401(k) retirement plan
become vested 30% after completion of three years of service, 40% after
four years and an additional 20% after each additional year until fully
vested after seven years. Does not include the following dollar values of
restricted stock which vested in 1998: David Simon -- $267,743; Richard S.
Sokolov -- $724,890; William J. Garvey -- $267,743; and James A. Napoli --
$267,743.
(5) Includes $210,389 of salary attributable to each of 1997 and 1996, and
paid in 1998.
(6) Includes a one-time payment made by CPI immediately prior to and in
connection with the CPI Merger to Hans C. Mautner of $9,700,000. Also
includes forgiveness of a $2,497,459 debt relating to shares of CPI stock
purchased under the CPI Employee Share Purchase Plan. Such debt was
forgiven pursuant to the terms of and in connection with the CPI Merger.
Does not include taxes in the amount of $2,728,322 paid by CPI on behalf
of Mr. Mautner immediately prior to and in connection with the CPI Merger.
11
Options Granted in 1998
The following table sets forth information with respect to the Named
Executive awarded stock options by the Companies in 1998.
OPTION GRANTS IN 1998
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term
- ------------------------------------------------------------------------------------ ---------------------
# of Securities % of Total Exercise or
Underlying Options Granted Base Price Expiration
Name Options (1) to Employees in 1998 ($/Share) Date 5% 10%
- ---- --------------- -------------------- ----------- ---------- ---------- ----------
Hans C. Mautner......... 237,500 61.7% 30.375 9/24/2008 $4,536,884 $9,681,985
- --------
(1) Represents number of shares of SPG Common paired with a beneficial
interest in SRC shares.
Option Exercises and Year-End Values
The following table sets forth information with respect to the unexercised
stock options granted to the Named Executives and held by them at December 31,
1998.
AGGREGATED OPTION EXERCISES IN 1998 AND DECEMBER 31, 1998 OPTION VALUES
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares at December 31, 1998(1) at December 31, 1998(2)
Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
David Simon............. -- -- 200,000 -- $1,250,000 --
Hans C. Mautner......... -- -- 250,956 237,500 607,314 --
Richard S. Sokolov...... -- -- -- -- -- --
William J. Garvey....... -- -- 55,000 -- 343,750 --
James A. Napoli......... -- -- 50,000 -- 312,500 --
- --------
(1) Represents number of shares of SPG Common paired with a beneficial
interest in SRC Shares.
(2) The closing price of the SPG Common, paired with a beneficial interest in
SRC Shares, as reported by the New York Stock Exchange on December 31,
1998 was $28.50. Value is calculated on the basis of the difference
between the exercise price and $28.50, multiplied by the number of shares
of Common Stock underlying "in-the-money" options.
Employment Agreements
Employment Agreement with Hans C. Mautner. Hans C. Mautner is a party to an
employment agreement with SPG (the "Mautner Agreement"). The Mautner Agreement
has a term ending September 24, 2003. Under the Mautner Agreement, Mautner
receives an annual base salary of $762,000 and is eligible to receive an
annual bonus in an amount up to 135% of his annual base salary. The severance
provisions in the Mautner Agreement provide that, in the event Mautner is
terminated by SPG other than for "Cause", death or disability, or by Mautner
for "Good Reason" (as such terms are defined therein), SPG will pay Mautner an
amount equal to the product of three times the sum of (i) Mautner's then
annual base salary and (ii) his then annual bonus and will contribute an
amount to the CPI Supplemental Executive Retirement Plan, as amended and
restated effective as of August 1, 1997 (the "SERP") equal to 33% of the sum
of his annual base salary and bonus, as well as continue to provide certain
employee benefits. In addition, all then outstanding unvested options granted
to Mautner shall become immediately vested and exercisable and remain
exercisable for their original term. In addition, under the Mautner Agreement,
SPG agreed to grant to Mautner on or before September 24, 1999, an
12
option to acquire 62,500 shares of SPG Common with an option price equal to
the fair market value of such stock on the date of grant. Such option shall
vest in installments within three years of the date of grant.
The Mautner Agreement contains a golden parachute excise tax gross-up
provision, under which Mautner will be entitled to be made whole on excise
taxes imposed under Section 4999 of the Code.
Employment Agreement with Richard S. Sokolov. Richard S. Sokolov is a party
to an employment agreement with SPG (the "Sokolov Agreement"). The Sokolov
Agreement has an initial term which ended August 9, 1997 and provides for two
automatic one-year extensions of the term unless either party gives the other
party notice that the term will not be extended. Under the Sokolov Agreement,
Sokolov receives an annual base salary of $508,500, subject to annual review
and adjustment, and is eligible to receive a cash bonus of up to 75% of his
base salary.
The severance provisions in the Sokolov Agreement provide that, in the
event Sokolov is terminated by SPG other than for "Cause", death or
disability, or by Sokolov for "Good Reason" (as such terms are defined
therein), SPG will pay Sokolov an amount equal to the sum of all accrued and
unpaid base salary plus one-year's then current base salary and bonus, and
accelerate the vesting of his unearned stock awards.
Option Plans
General. During 1998, SPG maintained two option plans, the Employee Stock
Plan (the "1993 Plan") and the Director Stock Option Plan (the "Director
Plan") until September 24, 1998, the effective date of the CPI Merger. CPI
maintained its 1993 Share Option Plan (the "CPI Option Plan") until September
24, 1998. All options outstanding and not exercised under the 1993 Plan, the
Director Plan and the CPI Option Plan have been converted into similar awards
under SPG's 1998 Stock Incentive Plan (the "1998 Plan" and together with the
1993 Plan, the Director Plan and the CPI Option Plan, the "Option Plans").
Under the 1998 Plan, a maximum of 6,300,000 shares of SPG Common (subject to
adjustment) are available for issuance to eligible officers, key employees,
"Eligible Directors", advisors and consultants for positions of substantial
responsibilities with the Companies. "Eligible Directors" are directors of SPG
who are not employees of the Companies or their affiliates. All officers, key
employees, advisors and consultants of the Companies and their affiliates
(except for Melvin Simon and Herbert Simon) and all Eligible Directors are
eligible to be granted awards under and participate in the 1998 Plan. In
addition, Eligible Directors receive automatic grants, as described below.
The 1998 Plan is administered by the Compensation Committee of the Boards
of Directors (the "Committee"). During the ten-year period following the
adoption of the 1998 Plan, the Committee may grant the following types of
awards: incentive stock options ("ISOs") within the meaning of section 422 of
the Code, "nonqualified stock options" ("NQSOs" and together with ISOs,
"Options"), stock appreciation rights ("SARs"), performance units and shares
of restricted or unrestricted SPG Common. Each share of SPG Common issued
under the 1998 Plan, whether issued directly, or through the exercise of an
Option, will be paired with a beneficial interest in SRC Shares.
Discretionary Awards. The terms and conditions of Options, SARs and
restricted stock awards granted under the 1998 Plan are set out in written
agreements which will contain such provisions as the Committee from time to
time deems appropriate.
The terms of Options granted under the 1998 Plan are generally determined
by the Committee within the terms of the 1998 Plan. The exercise price for any
Option may not be less than the fair market value of a share of SPG Common on
the date of grant. No Option will be exercisable after the expiration of ten
years from the date of its grant. The 1998 Plan provides that, unless
otherwise determined by the Committee, Options generally vest 40% on the first
anniversary of the date of grant, an additional 30% on the second anniversary
of the date of grant and become 100% vested three years after the date of
grant. The Option exercise price may be paid (i) by certified or official bank
check, (ii) in the discretion of the Committee, by personal check, (iii) in
shares of SPG
13
Common owned by the optionee for at least six months and which have a fair
market value on the date of exercise equal to the exercise price, (iv) in the
discretion of the Committee, by delivery to SPG of a promissory note and
agreement providing for payment with interest on any unpaid balance, (v)
through a brokered exercise, (vi) by any combination of the above, or (vii) by
any other means permitted by the Committee, in its discretion.
A SAR may be granted in connection with all or any part of an Option
granted under the 1998 Stock Incentive Plan or may be granted independent of
any Option. SARs granted in connection with an Option will become exercisable
and lapse according to the same vesting schedule and lapse rules that are
established for the corresponding Option. SARs granted independent of any
Option will vest and lapse according to the terms and conditions set by the
Committee. A SAR will entitle its holder to be paid an amount equal to the
excess of the fair market value of the SPG Common subject to the SAR on the
date of exercise over the exercise price of the related Option, in the case of
a SAR granted in connection with an Option, or the fair market value of the
SPG Common subject to the SAR on the date of exercise over the fair market
value on the date of grant in the case of a SAR granted independent of an
Option.
Subject to the discretion of the Committee, certificates representing
restricted stock awards may (i) be issued to a grantee bearing an appropriate
legend specifying that such shares are subject to restrictions or (ii) be held
in escrow until the end of the restricted period set by the Committee. During
the restricted period, restricted stock will be subject to transfer
restrictions and forfeiture in the event of termination of employment with the
Companies or any of their affiliates and such other restrictions and
conditions established by the Committee at the time the restricted stock is
granted.
To the extent deemed necessary and desirable by the Committee, the terms
and conditions of performance unit awards granted under the 1998 Plan will be
set out in written agreements. Performance unit awards provide for future
payment of cash or SRC Shares, or any other equivalent consideration deemed
appropriate by the Committee, to the grantee upon the attainment of certain
"Performance Goals" (as defined in the 1998 Plan) established by the Committee
over specified periods. At the end of each performance award period, the
Committee decides the extent to which the Performance Goals have been attained
and the amount of cash, SRC Common Stock, or other consideration, to be
distributed to the grantee.
Automatic Awards For Eligible Directors. The 1998 Plan provides for
automatic grants of Options ("Director Options") to Eligible Directors. Upon
the first day of the first calendar month following the month in which any
person first becomes an Eligible Director, such person will be automatically
granted without further action by the Board of Directors of SPG a Director
Option to purchase 5,000 shares of SPG Common (an "Initial Award"); provided,
however, that an Eligible Director who previously served as a director of SDG
or CPI shall not receive an Initial Award. Thereafter, on the date of each SPG
annual meeting of stockholders (the "Annual Meeting") held after January 1,
1999, each Eligible Director who continues as an Eligible Director will
automatically be granted each year, without further action by the Board of
Directors of SPG, a Director Option to purchase 3,000 shares of SPG Common
multiplied by the number of calendar years that have elapsed since such
person's last election to the Board of Directors of SPG, SDG or CPI (the
"Annual Award"); provided, however, that if any person becomes an Eligible
Director during the 60-day period prior to the Annual Meeting in any year,
then such Eligible Director will not receive the Annual Award.
The exercise price per share of Director Options is 100% of the fair market
value of the SPG Common on the date the Director Option is granted. All
Director Options shall become vested and exercisable on the first anniversary
of the date of grant or such earlier time in the event of a "Change in
Control" (as defined in the 1998 Plan). Upon termination of any person's
service as an Eligible Director, all Director Options granted will expire 30
days following the date of termination.
Stock Incentive Program. Under SPG's five-year stock-based incentive
program (the "Stock Incentive Program"), an aggregate of 1,000,000 restricted
shares of SPG Common were allocated in March 1995 under the 1993 Plan to a
total of 50 executive officers and key employees. A percentage of the total
number of shares allocated, ranging from 15% to 25%, may be earned in each of
the five years of the program only if SPG attains
14
annual and cumulative targets for growth in Funds From Operations. The
determination of whether SPG has achieved its targets for a particular year is
made in March of the following year (the "Determination Date") and, to the
extent the targets have been achieved, a portion of the allocation of shares
of restricted stock is deemed to be earned and is awarded as of the
Determination Date. Although the participant is entitled to vote all earned
shares and receive distributions paid thereon as of the Determination Date,
earned shares vest in four installments of 25% each on January 1 of each year
following the year in which the Determination Date occurs. The participant
must be employed by SPG on the day prior to the vesting date to receive such
shares, otherwise the earned shares are forfeited. Each share of SPG Common
issued under the Stock Incentive Program is paired with a beneficial interest
in SRC Shares.
Incentive Bonus Plan
The Incentive Bonus Plan (the "Bonus Plan") is intended to provide senior
executives and key employees with opportunities to earn incentives based upon
the performance of SPG, the participant's business unit and the individual
participant. At the beginning of a year, the Committee specifies the maximum
incentive pool available for distributions and approves performance measures
for each participant and three levels of performance that must be attained in
order to trigger the award of the bonuses. Each participant's bonus award for
the year is expressed as a percentage of base salary, a fixed dollar amount,
or a percentage of the available incentive pool. Bonus amounts for each year
are determined in the following February with disbursement in March.
Deferred Compensation Plan
The Companies have a non-qualified deferred compensation plan (the
"Deferred Compensation Plan") that provides deferred compensation to certain
executives and key employees. Under the Deferred Compensation Plan, a
participant may defer all or a part of his compensation. SPG, at its
discretion, may contribute a matching amount equal to a rate selected by SPG,
and an additional incentive contribution amount on such terms as SPG may
specify. All participant deferrals and matching and incentive contributions
are credited to a participant's account and remain general assets of SPG. A
participant's elective deferrals are fully vested. Except in the case of death
or disability of the participant or insolvency or a change in control of SPG,
a participant becomes vested in matching and incentive contributions 20% after
one year of service and an additional 20% for each year thereafter. Upon death
or disability of the participant or insolvency or a change in control of SPG,
a participant becomes 100% vested in his account.
All contributions under the Deferred Compensation Plan are deposited in
what is commonly referred to as a "rabbi trust" arrangement pursuant to which
the assets of the trust are subject to the claims of SPG's general creditors
in the event of SPG's insolvency. The trust assets are invested by the trustee
in its sole discretion. Payments of a participant's elective deferrals and
vested matching contributions are made as elected by the participant. These
amounts would be paid earlier in the event of termination of employment or
death of the participant, an unforeseen emergency affecting the participant or
a change in control of SPG.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
General Principles
As a general matter, the Companies have adopted a compensation philosophy
which embraces the concept of pay-for-performance. The Companies' strategy is
to link executive management compensation with the Companies' performance and
stockholder return and to reward management for results that are consistent
with the key goals of the Companies. This is described further below under
"1998 Executive Officer Compensation." The Companies believe that their
compensation program attracts result-oriented employees and motivates them to
achieve higher levels of performance.
It is the Companies' policy to establish executive officer base salary at
levels which are slightly below industry statistical norms for comparable real
estate investment trusts ("REITs"), while providing significant additional
compensation opportunities through programs which are linked directly to
Company performance.
15
1998 CEO Compensation
David Simon was paid a base salary of $800,000 for 1998 and did not receive
a bonus with respect to 1998 performance. In addition, David Simon was paid
$420,777 in 1998 as retroactive salary increases for 1996 and 1997. At
December 31, 1998, he held exercisable options to acquire 200,000 shares of
SPG Common. David Simon's total allocation under the Stock Incentive Program
of 54,600 shares of restricted stock were earned and awarded as of December
31, 1998 because the Companies had met targets for growth in Funds From
Operations for prior years. Based on information provided by third parties,
management believes that David Simon's total compensation in 1998 was in the
25th percentile for chief executive officers of a peer group of REITs.
1998 Executive Officer Compensation
The Companies compensate their executive officers through four principal
elements. The first element, base pay, is determined through a review and
analysis of peers in the REIT industry in order to determine reasonable and
competitive compensation levels. The second element is participation in a
discretionary Bonus Plan. Under the Bonus Plan, participants have
opportunities to participate in an incentive pool depending upon performance
of the Companies, the participant's business unit and the individual
participant. Aggregate bonuses of $900,000 were paid in 1998 to the 12
eligible executive officers with respect to 1998 performance. See "EXECUTIVE
COMPENSATION--Incentive Bonus Plan." The two remaining compensation elements
are intended to link executive compensation more directly to increases in
value of the Paired Shares. The third element consists of option awards under
the Option Plans. Options to purchase 380,000 shares were granted to two
former executive officers of CPI in connection with the CPI Merger. At
December 31, 1998, the 12 eligible executive officers held vested options to
acquire an aggregate of 853,456 shares that were previously granted under the
Option Plans. The fourth element consists of allocation of restricted stock
under the Stock Incentive Program. Under the Stock Incentive Program,
allocations of restricted shares are earned and awarded if the performance-
based goals of the program are met. All of the 514,556 shares of restricted
stock allocated to the 10 eligible executive officers under the Stock
Incentive Program, were earned and awarded as of December 31, 1998 because the
Companies met targets for growth in Funds From Operations for prior years. See
"EXECUTIVE COMPENSATION--Option Plans--Stock Incentive Program." The Companies
believe that each element of its executive compensation program attracts
results-oriented individuals and motivates them to achieve levels of
performance which are consistent with the performance goals of the Companies
and their stockholders.
Compensation Committee:
Philip J. Ward, Chairman
Robert E. Angelica Birch Bayh
Herbert Simon Fredrick W. Petri
Compensation Committee Interlocks and Insider Participation
Other than Herbert Simon, who is a Co-Chairman of the Board of the
Companies, no member of the Compensation Committee during 1998 was an officer,
employee or former officer of the Companies or any of their subsidiaries or
had any relationship requiring disclosure herein pursuant to regulations of
the Securities and Exchange Commission. No executive officer of the Companies
served as a member of a compensation committee or a director of another entity
under circumstances requiring disclosure herein pursuant to regulations of the
Securities and Exchange Commission.
16
PERFORMANCE GRAPH
The following line graph sets forth a comparison of the percentage change
in the cumulative total shareholder return on the Common Stock of SDG from
December 31, 1993 through September 24, 1998 and for the SPG Common from
September 24, 1998 through December 31, 1998 as compared to the cumulative
total return of the S&P Composite--500 Stock Index and the NAREIT Equity REIT
Total Return Index for the period December 31, 1993 through December 31, 1998.
The graph assumes an investment of $100 in Common Stock of SDG on December 31,
1993, a reinvestment of dividends and actual increase of the market value of
the Common Stock of SDG or the SPG Common relative to an initial investment of
$100. The comparisons in this table are required by the Securities and
Exchange Commission and are not intended to forecast or be indicative of
possible future performance of the SPG Common.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG Simon Property Group, Inc., S&P 500 INDEX AND NAREIT Equity REIT Total
Return Index
Measurement Period Simon Property S&P NAREIT Equity REIT
(Fiscal Year Covered) Group, Inc. 500 INDEX Total Return Index
- --------------------- -------------- --------- ------------------
Measurement Pt-
12/31/93 $100.00 $100.00 $100.00
FYE 12/31/94 $115.27 $101.31 $103.17
FYE 12/31/95 $122.86 $139.23 $118.92
FYE 12/31/96 $170.57 $171.19 $160.86
FYE 12/31/97 $192.01 $228.32 $193.45
FYE 12/31/98 $178.71 $293.57 $159.59
17
CERTAIN TRANSACTIONS
Transactions with the Simons
SPG has entered into noncompetition agreements with Melvin Simon, Herbert
Simon and David Simon (collectively, the "Simons"), all of whom are executive
officers of the Companies. Pursuant to such agreements and except as set forth
below, Melvin Simon and Herbert Simon are prohibited from engaging in the
shopping center business in North America other than through SPG or as passive
investors until the later of (i) December 20, 2003, or (ii) the date that they
are no longer directors or officers of SPG, and David Simon is prohibited from
engaging in the shopping center business in North America other than through
SPG and, with certain exceptions, for two years thereafter if he resigns or is
terminated for cause. The foregoing restrictions will not prohibit Melvin
Simon, Herbert Simon or David Simon from having an ownership interest in the
properties in which the Simons previously owned an interest that were not
contributed to the predecessor of SPG in 1993 (the "Excluded Properties") and
in M.S. Management Associates, Inc. (the "Management Company"), and serving as
directors and officers of the Management Company. It is anticipated that such
commitments will not, in the aggregate, involve a material amount of time, but
no assurance can be given in this regard. In addition, Melvin Simon and
Herbert Simon may pursue other investment activities in which they are
currently engaged.
The Simons continue to own, in whole or in part, the Excluded Properties.
The Management Company has entered into management agreements with the
partnerships that hold the Excluded Properties, some of which agreements were
not negotiated on an arms-length basis. Management believes, however, that the
terms of such management agreements are fair to the Companies.
The Simons and certain of their family members may from time to time and
are permitted by the Companies' conflicts of interest policies to invest in
tenants in shopping centers owned in whole or in part by the Companies or
their affiliates, provided that (1) such investment does not exceed 25% of the
outstanding equity capital of any such tenant, (2) the Simon family has no
right to participate in the day to day management of any such tenant and (3)
any lease transaction between the Companies, Simon Property Group, L.P. (the
"Operating Partnership") and their respective affiliates and the tenant in
which an investment has been made by a member of the Simon family is an arm's
length transaction providing for payment of prevailing market rents. As of
December 31, 1998, members of the Simon family or entities controlled by them
have investments in seven tenants in shopping centers owned in whole or in
part by SPG. The investments and the leases were entered into on terms
consistent with the conflicts of interest policies set forth above. Such an
investment may cause income from the applicable tenant to be nonqualifying
income for purposes of one of the tests for SPG's qualification as a REIT for
federal income tax purposes. In this regard, rent received from a tenant will
not be qualifying income if SPG, or an owner of ten percent or more of SPG,
directly or constructively owns ten percent or more of the tenant. Management
believes that the amount of nonqualifying income due to these investments
under the foregoing income test does not, and future investments by the Simons
will not, adversely impact SPG's qualification as a REIT.
In connection with the use of the aggregate proceeds of the initial public
offering and related financing to repay certain indebtedness encumbering the
Operating Partnership's properties, the Company repaid approximately $180
million of indebtedness owed to the Simons, which represented loans made by
the Simons in lieu of third-party financing. Of this amount, approximately
$110 million was used by the Simons to pay income taxes and other third-party
obligations associated with their real estate business. In addition, the
Simons were released from personal liability under guaranties provided by the
Simons by substituting guaranties by the Company, or the provision by the
Company of back-up guaranties in favor of the Simons, on approximately $111
million of such debt.
Management Company
The Management Company manages regional malls and community shopping
centers not wholly-owned by the Operating Partnership and certain other
properties and also engages in certain property development
18
activities. Of the outstanding voting common stock of the Management Company,
95% is owned by the Simons, which will enable the Simons to control the
election of the board of directors of the Management Company. The Operating
Partnership owns common stock representing 80% of the value of the outstanding
stock of the Management Company, all of the outstanding participating
preferred stock of the Management Company and a mortgage note of the
Management Company, which entitles SPG to more than 90% of the anticipated
after-tax economic benefits, in the form of dividends and interest, of the
Management Company. The Management Company must receive the approval of a
majority of the Independent Directors in order to provide services for any
property not currently managed by the Management Company unless SPG owns at
least a 25% interest in such property. The Management Company has agreed with
SPG that, if in the future SPG is permitted by applicable tax law and
regulations to conduct any or all of the activities that are now being
conducted by the Management Company, the Management Company will not compete
with SPG with respect to new or renewal business of this nature.
Relationship with Oppenheimer, Wolff, Donnelly & Bayh LLP
During 1998, the Companies engaged the Washington, D.C. law firm of
Oppenheimer, Wolff, Donnelly & Bayh LLP (formerly Bayh, Connaughton & Malone,
P.C.) to provide certain legal services. Birch Bayh, a director of the
Companies, is a member of such firm.
Other Transactions
The Operating Partnership leases office space in Ohio from 7655
Corporation, an affiliate of EJDC, pursuant to a lease dated as of January 1,
1999 (the "Lease"). Ms. DeBartolo York, a director of the Companies, serves as
Chairman of the Board of EJDC and has been associated with EJDC in an
executive capacity since 1975.
Phillip J. Ward, a director of the Companies, is the Head of Real Estate
Investments for CIGNA Investments, Inc., which has, or its affiliates have,
made mortgage loans to the Companies or their affiliates, or entities in which
they have an interest, totaling approximately $412.2 million as of December
31, 1998. These loans are considered to be arm's length agreements.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Boards of Directors of the Companies have selected Arthur Andersen LLP
as the Companies' independent accountants for 1999, subject to stockholder
approval. Arthur Andersen LLP has served as the independent accountants of the
Companies since September 24, 1998 and prior to that date, were independent
accountants of SDG. Ernst & Young LLP served as the independent accountants of
CPI and CRC prior to September 24, 1998, the effective date of the CPI Merger.
During the two most recent fiscal years preceding the CPI Merger, to the
knowledge of the management of the Companies, there were no disagreements or
other reportable events between CPI or CRC and Ernst & Young LLP which, if not
resolved to the satisfaction of Ernst & Young LLP, would have caused it to
make reference to the matter of disagreement in connection with its report.
The Companies expect that representatives of Arthur Andersen LLP will be
present at the Meetings and will be afforded an opportunity to make a
statement if they desire to do so. The Companies also expect that such
representatives of Arthur Andersen LLP will be available at that time to
respond to appropriate questions addressed to the officer presiding at the
Meeting.
The Boards of Directors unanimously recommend a vote FOR ratification of
Arthur Andersen LLP as the Companies' independent accountants for 1999.
19
ANNUAL REPORT
The Annual Report of the Companies for the year ended December 31, 1998,
including financial statements audited by Arthur Andersen LLP, independent
accountants, and their report thereon, is being mailed with this Proxy
Statement. In addition, a copy of the Companies' Annual Report on Form 10-K
for the year ended December 31, 1998, will be sent to any stockholder, without
charge (except for exhibits, if requested, for which a reasonable fee will be
charged), upon written request to Shelly J. Doran, Simon Property Group, Inc.,
Investor Relations, P. O. Box 7033, Indianapolis, Indiana 46207.
STOCKHOLDER PROPOSALS AT 2000 ANNUAL MEETING
The date by which stockholder proposals must be received by the Companies
for inclusion in the proxy materials relating to the 2000 annual meetings of
stockholders is December 6, 1999. Notice of any other stockholder proposals
must be received by SPG between February 12, 2000 and March 13, 2000, as more
fully set forth in the By-laws of the Companies. In the event that the 2000
annual meeting of stockholders is called for a date that is not within thirty
(30) days before or after May 12, 2000, in order to be timely, notice by the
stockholder must be received not later than the close of business on the tenth
day following the day on which such notice of the date of the annual meeting
was mailed or such public disclosure of the date of the annual meeting was
made, whichever first occurs. Stockholder proposals must comply with all of
the applicable requirements set forth in the rules and regulations of the
Securities and Exchange Commission, including Rule 14a-8, as well as the
advance notification requirements set forth in the Companies' By-Laws. A copy
of the advance notification requirements may be obtained from James M.
Barkley, General Counsel and Secretary, Simon Property Group, Inc., 115 West
Washington Street, Indianapolis, Indiana 46204.
20
PROXY
SIMON PROPERTY GROUP, INC.
SPG REALTY CONSULTANTS, INC.
PROXY FOR ANNUAL MEETINGS OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1999
This Proxy is Solicited on Behalf of the Boards of Directors.
The undersigned holder(s) of shares of Common Stock of Simon Property
Group, Inc. ("SPG"), which are paired with a fractional interest in shares of
Common Stock of SPG Realty Consultants, Inc. ("SRC" and, with SPG, the
"Companies") hereby appoints Herbert Simon and David Simon and each of them, the
Proxies of the undersigned, with full power of substitution, to attend and
represent the undersigned at the Annual Meeting of Stockholders of SPG to be
held at The Indianapolis Hyatt Regency, One South Capitol Avenue, Indianapolis,
Indiana, on Wednesday May 12, 1999, at 11:00 a.m., Indianapolis time, and any
adjournment or adjournments thereof, and to vote all of such shares that the
undersigned is entitled to vote at such Annual Meeting or at any adjournment or
postponement thereof.
1. To elect seven directors of SPG to serve for a term of one year:
Nominees: Robert E. Angelica; Birch Bayh; Hans C. Mautner; G. William
Miller; J. Albert Smith, Jr.; Pieter S. van den Berg and Philip
J. Ward
2. To ratify the appointment of Arthur Andersen LLP as independent accountants
of SPG for 1999
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES LISTED UNDER PROPOSAL 1 AND FOR
PROPOSAL 2.
(THIS PROXY CONTINUES AND MUST BE SIGNED AND DATED ON THE REVERSE SIDE)
SEE REVERSE
SIDE
[X] Please mark your
vote as in this
example.
Vote Vote
FOR ALL WITHHELD
nominees for all
listed nominees
above in listed above
Proposal 1 in Proposal 1
1. [ ] [ ]
For, except vote withheld from the following nominee(s):
- ------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. [ ] [ ] [ ]
Appointment of Arthur Andersen LLP
3. In their discretion, the Proxies are authorized to vote upon such other
matters (none known at the time of solicitation of this proxy) as may
properly come before the Annual meeting or any adjournment or postponement
thereof.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting
of Stockholders, the Joint Proxy Statement furnished therewith, and the 1998
Annual Report to Shareholders. Any proxy heretofore given to vote the shares
which the undersigned is entitled to vote at the SPG Annual Meeting of
Stockholders is hereby revoked.
NOTE: Please fill in, sign and return this proxy in the enclosed envelope. When
signing as Attorney, Executor, Administrator, Trustee or Guardian, please give
full title as such. If signer is a corporation, please sign the full corporate
name by authorized officer. Joint owners should each sign individually. (Please
note any change of address on this proxy.)
Please sign exactly as name appears hereon. Joint owners should each sign.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE
PROXY
SERIES A PAIRED SHARES
SIMON PROPERTY GROUP, INC.
SPG REALTY CONSULTANTS, INC.
PROXY FOR ANNUAL MEETINGS OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1999
This Proxy is Solicited on Behalf of the Boards of Directors.
The undersigned holder(s) of shares of Series A Convertible Preferred
Stock of Simon Property Group, Inc. ("SPG"), which are paired with a fractional
interest in shares of Common Stock of SPG Realty Consultants, Inc. ("SRC" and,
with SPG, the "Companies") hereby appoints Herbert Simon and David Simon and
each of them, the Proxies of the undersigned, with full power of substitution,
to attend and represent the undersigned at the Annual Meetings of Stockholders
of the Companies to be held at The Indianapolis Hyatt Regency, One South Capitol
Avenue, Indianapolis, Indiana, on Wednesday, May 12, 1999, at 11:00 a.m.,
Indianapolis time, and any adjournment of adjournments thereof, and to vote all
of such shares that the undersigned is entitled to vote at such Annual Meetings
or at any adjournment or postponement thereof:
1. To elect seven directors of SPG to serve for a term of one year:
Nominees: Robert E. Angelica; Birch Bayh; Hans C. Mautner; G. William
Miller; J. Albert Smith, Jr.; Pieter S. van den Berg and Philip J.
Ward
2. To elect thirteen directors of SRC to serve for a term of one year:
Nominees: Robert E. Angelica; Birch Bayh; Hans C. Mautner; G. William
Miller; Fredrick W. Petri; Melvin Simon; Herbert Simon; David
Simon; J. Albert Smith, Jr.; Richard S. Sokolov; Pieter S. van den
Berg; Philip J. Ward and M. Denise DeBartolo York
3. To ratify the appointment of Arthur Andersen LLP as independent accountants
of the Companies for 1999
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES LISTED UNDER PROPOSALS 1 AND 2 AND
FOR PROPOSAL 3.
(THIS PROXY CONTINUES AND MUST BE SIGNED AND DATED ON THE REVERSE SIDE)
-----------
SEE REVERSE
SIDE
-----------
[X] Please mark your
vote as in this
example.
Vote Vote
FOR ALL WITHHELD
nominees for all
listed nominees
above in listed above
Proposal 1 in Proposal 1
1. [ ] [ ]
For, except vote withheld from the following nominee(s):
- ------------------------------------------------------------------
Vote Vote
FOR ALL WITHHELD
nominees for all
listed nominees
above in listed above
Proposal 2 in Proposal 2
2. [ ] [ ]
For, except vote withheld from the following nominee(s):
- ------------------------------------------------------------------
FOR AGAINST ABSTAIN
3. [ ] [ ] [ ]
Appointment of Arthur Andersen LLP
4. In their discretion, the Proxies are authorized to vote upon such other
matters (none known at the time of solicitation of this proxy) as may
properly come before the Annual meeting or any adjournment or postponement
thereof.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meetings
of Stockholders, the Joint Proxy Statement furnished therewith, and the 1998
Annual Report to Shareholders. Any proxy heretofore given to vote the paired
shares which the undersigned is entitled to vote at the Annual Meeting(s) of
Stockholders is hereby revoked.
NOTE: Please fill in, sign and return this proxy in the enclosed envelope. When
signing as Attorney, Executor, Administrator, Trustee or Guardian, please give
full title as such. If signer is a corporation, please sign the full corporate
name by authorized officer. Joint owners should each sign individually. (Please
note any change of address on this proxy.)
Please sign exactly as name appears hereon. Joint owners should each sign.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE
PROXY
SIMON PROPERTY GROUP, INC.
SPG REALTY CONSULTANTS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1999
This Proxy is Solicited on Behalf of the Boards of Directors.
The undersigned holder(s) of shares of Common Stock of Simon Property
Group, Inc. ("SPG"), which are paired with a fractional interest in shares of
Common Stock of SPG Realty Consultants, Inc. ("SRC" and, with SPG, the
"Companies") hereby appoints Herbert Simon and David Simon and each of them, the
Proxies of the undersigned, with full power of substitution, to attend and
represent the undersigned at the Annual Meeting of Stockholders of SRC to be
held at The Indianapolis Hyatt Regency, One South Capitol Avenue, Indianapolis,
Indiana, on Wednesday May 12, 1999, at 11:00 a.m., Indianapolis time, and any
adjournment or adjournments thereof, and to vote all of such shares that the
undersigned is entitled to vote at such Annual Meeting or at any adjournment or
postponement thereof.
1. To elect thirteen directors of SRC to serve for a term of one year:
Nominees: Robert E. Angelica; Birch Bayh; Hans C. Mautner; G. William
Miller; Fredrick W. Petri; Melvin Simon; Herbert Simon; David
Simon; J. Albert Smith, Jr.; Richard S. Sokolov; Pieter S. van
den Berg; Philip J. Ward and M. Denise DeBartolo York
2. To ratify the appointment of Arthur Andersen LLP as independent accountants
of the Companies for 1999
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES LISTED UNDER PROPOSAL 1 AND FOR
PROPOSAL 2.
(THIS PROXY CONTINUES AND MUST BE SIGNED AND DATED ON THE REVERSE SIDE)
SEE REVERSE
SIDE
[X] Please mark your
vote as in this
example.
Vote Vote
FOR ALL WITHHELD
nominees for all
listed nominees
above in listed above
Proposal 1 in Proposal 1
1. [ ] [ ]
For, except vote withheld from the following nominee(s):
- ------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. [ ] [ ] [ ]
Appointment of Arthur Andersen LLP
3. In their discretion, the Proxies are authorized to vote upon such other
matters (none known at the time of solicitation of this proxy) as may
properly come before the Annual meeting or any adjournment or postponement
thereof.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meetings
of Stockholders, the Joint Proxy Statement furnished therewith, and the 1998
Annual Report to Shareholders. Any proxy heretofore given to vote the shares
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
is hereby revoked.
NOTE: Please fill in, sign and return this proxy in the enclosed envelope. When
signing as Attorney, Executor, Administrator, Trustee or Guardian, please give
full title as such. If signer is a corporation, please sign the full corporate
name by authorized officer. Joint owners should each sign individually. (Please
note any change of address on this proxy.)
Please sign exactly as name appears hereon. Joint owners should each sign.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE